Stryker
(NYSE: SYK)
announced a deal to sell its U.S. spine implants business to investment firm Viscogliosi Brothers, which will call the new company VB Spine.
Also after the market closed yesterday, the world’s second-largest orthopedic device company announced the retirement of its chief financial officer, reported fourth-quarter and full-year operating results, and offered its outlook for the year ahead.
The next day, SYK shares were down slightly to $393.82 apiece. (The S&P 500 was also down slightly.)
Expected to close in the first half of 2025, the deal also includes a binding offer for the spine implants business in France, “subject to required consultations with employees and/or employee representatives.”
Portage, Michigan–based Stryker said it also plans to sell its spine implants businesses in other international markets.
“We believe that the spinal implants business, with its comprehensive portfolio and strong sales channel, will thrive as an independent company,” Stryker CEO and Chair Kevin Lobo said in a news release. “With dedicated resources and a focused strategy, the business will be well positioned to succeed as part of Viscogliosi Brothers.”
Stryker’s U.S. spinal implants business and VB Spine will continue to operate as separate entities until the transaction closes, at which point VB Spine will have exclusive access to Stryker’s Mako Spine and Copilot for use with VB Spine’s implants in spine procedures.
Financial terms were not disclosed. Stryker said the deal “will enhance the focus of both Stryker and VB Spine to meet the needs of customers and their patients and is expected to achieve faster growth and deliver greater value for all stakeholders.”
“We’ve been looking at this market for a long time and we’ve been trying to make improvements in our spine business,” Lobo said during a conference call for investors. “We are excited about the enabling tech with Copilot and Mako Spine, but fundamentally just have better opportunities to invest our funds in other businesses.”
Earlier this month, Stryker announced a definitive agreement to purchase Inari Medical for around $4.9 billion. The company says it expects that deal to close near the end of February.
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Marc, John and Anthony Viscogliosi — who co-founded New York City-based Viscogliosi Brothers in 1999 — said in the news release they “have long admired Stryker for its comprehensive spine portfolio, incredible talent, and strong culture.”
“We see a tremendous opportunity to provide the focus, surgeon-centric innovation, and commercial execution needed to grow the business and further impact patient lives and outcomes,” they said.
Viscogliosi Brothers said it focuses on “identifying and building groundbreaking innovations in healthcare, aiming to address unmet clinical needs, enhance patient outcomes, and drive cost efficiency in the healthcare system.”
The family office said it has transformed spine industry businesses including Spine Solutions, Spine Next, Paradigm Spine, Simplify Medical, Centinel Spine, Companion Spine, Spine BioPharma and Woven Orthopedics Technologies.
Stryker’s CFO is retiring
Stryker also announced the retirement of VP and Chief Financial Officer Glenn Boehnlein after 22 years with the orthopedics company. He’ll be replaced by Preston Wells, the CFO for Stryker’s Orthopaedics Group, on April 1.
“I want to thank Glenn for his performance drive, strong business partnership, and excellent leadership of the Finance and IT organizations,” Lobo said in a news release. “Glenn is a growth champion who invested in developing talent, including Preston Wells. … I am confident in Preston’s ability to help Stryker continue to deliver strong results.”
Wells previously led Investor Relations, Enterprise Financial Planning & Analysis, and the sales finance and sales operations teams that supported Stryker’s Spine business.
Stryker’s 2024 results and 2025 outlook
Stryker reported sales of $6.4 billion for the fourth quarter (ended Dec. 31, 2024), up 11% from the same quarter a year ago.
Quarterly profits came in at $546 million, down 53% from the last quarter of 2023. That equaled $1.43 earnings per share (EPS), or adjusted EPS of $4.01.
Analysts were expecting adjusted EPS of $3.87 on $6.36 billion of revenue.
Full-year 2024 sales came in at $22.6 billion, up 10 percent from the year before. Net income for 2024 was $3.0 billion, down 5% from 2023.
“We delivered another year of double-digit organic sales growth while continuing to expand adjusted operating margins and drive adjusted earnings per share growth,” Lobo said in a news release. “We also had many product launches and were active in M&A to further enhance our position in high-growth end markets. I would like to thank our teams for their efforts in delivering excellent results and positioning Stryker for sustained success in 2025 and beyond.”
Stryker said it expects organic net sales growth in the range of 8% to 9% in 2025 and adjusted EPS of $13.45 to $13.70 “based on our momentum exiting 2024, a sustained level of procedural volumes, strong demand for our capital products and our presence in healthy end markets.”
Mike Matson, senior research analyst at Needham & Co., stuck with his Buy rating of SYK shares: “We believe that 2025 guidance is likely to prove conservative, and we reiterate our Buy rating.”
BTIG analysts also kept their Buy rating. Meanwhile, Truist analysts rate SYK shares as a Hold, saying that Stryker still boasts one of the better growth profiles among large medtech companies, but they still see better EPS upside elsewhere in the industry.
This article originally ran on Tuesday, Jan. 28, 2025. Updated Jan. 29 with next-day stock price and analyst comments.